After agonizing learn-and-practice stage you finally consider yourself a successful forex trader. You have accepted the responsibility of building your own trading plan, you are self-confident even when losses are encountered, you follow a strict discipline vital for your forex trading survival, you trade almost without emotions… and then you accidentally click on the wrong button! What do forex traders do when a wrong instrument is selected? What is the right solution when you find yourself surrounded by unanalyzed position which is most likely to be doomed?
Errors happen. I am not talking about trading mistakes, wrong analysis, slip-up in the trading plan, or unpolished forex strategy. I am talking about inaccuracy caused by poor finger coordination or computer malfunction! Not a lot of traders admit it, but at some point or another we all click on the wrong button, select the wrong instrument, go long when actually meant to go short, log into demo account conviced that it is life, triple click when it is one-click deal or our computer screen just freezes. Just like in driving, if you need glasses wear them with every ride! Clumsy mistakes are fairly easy to make, especially with forex trading platforms where all the instruments are listed in a drop down menu from a single order ticket.
First reaction to unexpected error is a complete panic attack! Your heart starts pounding, you can’t get enough air to breathe, you are dizzy and paralyzed from head to toe! The awkward error resembles gambling where casino house takes all the money, except when you are trading there are no cute, sympathetic dealers or underdressed ladies with beer and pretzels.
After couple of angry looks at your computer mouse and shaking fingers, in most cases a forex trader clicks to get out of the unwanted trade, sometimes remarkably without much loss or even with a profit. No matter what, an experienced forex trader chooses to get out of the unexpected situation as soon as possible. It is definitely better to trip and end up spilling half of your pint instead of carelessly dumping it down from the 10th floor on a head of a police officer!
Once you have made an error the best option is to exit unless of course you see a profit straight away and the candle charts are dancing up in the sky. Keep in mind that a smaller loss is better than an agonizing pain of huge defeat. There is always another day and another trade, so try to hold your horses.
Other forex traders disagree with a fast exit and choose to wait and see. Some believe in sitting on it and seeing what happens next. Just because it was not your intention to trade, it doesn’t mean you are heading towards bankruptcy. The unexpected trades are greeted with curiosity and eagerness to give it a try.
We all know that any forex trader needs a plan. Without a well-designed forex plan of action trader doesn’t know when to exit the trade, when to enter and how much profit should be expected. There is nothing worse as a free-fall in forex trading, because there is no parachute or safety net to save you!
So no matter what kind of forex trader you are, these errors must be included in your trading plan. Even bad surprises shouldn’t sweep you off your feet. A plan for every situation is the way to succeed in forex trading, so apart from finding the reasons to enter/exit trades, figuring out your stop points, calculating profit/loss ratio, following the money management and control the emotions, your plan needs to consist the panic-attack management strategy in case of stupid-error invasion.